CoreWeave ( CRWV 1.70% ) has rarely traded quietly since its 2025 market debut, and the past week was no exception. Shares jumped about 10% on June 16 to around $117. As of this writing, that still leaves the artificial intelligence (AI) cloud provider about 37% below the high near $187 it set last June, though well above its 52-week low near $64. And the latest pop may owe as much to index mechanics as to the business itself. CoreWeave is set to join the Nasdaq-100 on June 22, a change that forces index-tracking funds to buy the stock regardless of price. Stacked on top was renewed optimism about the company's swelling pile of contracted future revenue. So for anyone catching up now, the question isn't whether CoreWeave is growing. It is. And then some. It's whether the case for the stock holds up after swings this sharp. Image source: Getty Images. Impressive demand CoreWeave's first-quarter revenue (the period ended March 31) rose 112% year over year to about $2.08 billion, climbing 32% from the prior quarter. The bigger number, though, is the backlog, which reached $99.4 billion, up about 50% in three months -- what management called its strongest bookings quarter yet. That backlog increasingly leans on a wider roster of customers. CoreWeave signed a fresh $21 billion commitment with Meta Platforms in March and a multi-year agreement with AI lab Anthropic to support its Claude models. Management said 10 clients are now committed to spending at least $1 billion each -- a meaningful change for a business that drew 62% of its 2024 revenue from a single customer: Microsoft . "[W]e have reached hyperscale with more than 3.5 gigawatts of contracted power, up more than 400 megawatts this quarter alone," CEO Mike Intrator said on CoreWeave's first-quarter earnings call. The cost of keeping up Building its capacity, however, is enormously expensive. And the spending keeps climbing. CoreWeave now expects capital expenditures of $31 billion to $35 billion this year, and much of the build-out is funded with borrowed money. The bill for that debt is mounting fast. Net interest expense more than doubled from a year earlier to $536 million in the quarter, and the company's net loss notably widened to $740 million. Concentration still has bears watching, too. A handful of large customers and AI labs continue to account for much of CoreWeave's backlog, and a change in any one of their plans could significantly alter the company's growth trajectory (and the bull case). The model also rests on the bet that demand for AI computing will remain strong even as the largest cloud providers continue building their own data centers. Today's Change ( -1.70 %) $ -1.99 Current Price $ 115.04 Then there's the price. CoreWeave doesn't turn a profit, so there's no price-to-earnings ratio to anchor to. And at a market capitalization of about $65 billion, the stock trades at about five times the midpoint of this year's revenue guidance -- a rich figure for a capital-intensive business still losing money and carrying tens of billions in debt. Ultimately, however, CoreWeave has built something significant with great long-term potential. Its backlog offers unusual visibility into years of future revenue, and a tight relationship with Nvidia ( NVDA 1.38% ) , which bought another $2 billion of CoreWeave stock last quarter, keeps it near the front of the line for the chips its customers covet. For investors who think the AI build-out has years left and can stomach the stock's wild volatility, holding a small position may make sense. For most investors, however, avoiding the stock is probably the right idea. At this price, the market is already counting on CoreWeave to convert its enormous backlog into profits with near flawless execution -- a tall order for a company still spending far more than it brings in. I'd personally rather keep this stock on a watch list than chase the latest pop.

Source: The Motley Fool

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